Two decades of community forestry in Nepal: What have we learned?

Two decades of community forestry in Nepal: What have we learned?
as part of equity share in the name of 42 bipanna households out of the total investment of
Rs 583,000 envisaged in the business plan prepared by the local facilitator. Paper-making
equipment was purchased, and women and men trained in its use. Activities commenced,
and in the fi rst two years an income of Rs 250,800 was generated. However, a number of
diffi culties arose, as follows:
• Labour was a limiting factor. Although the bipanna were aware of their shares in
the company, this was not a suffi cient motivation for them to choose to work for the
enterprise when they could be paid better elsewhere. The enterprise paid only Rs 160/
day, and payment was only made once the product had been sold – meaning there was
often a considerable delay until the workers got paid. At the time, a road was being built
– for which labourers received Rs 200/day, on the day. Seasonal porter work (carrying
potatoes) was also better paid.
• Important managerial decisions often got delayed. Being set up in a democratic
manner, representatives of all 8 CFUGs were required participate in key management
decisions. This proved to be time-consuming and diffi cult to organise.
• Leadership was contested, with complaints being made against the enterprise Director,
who turned out to be undemocratic and top down.
At a meeting of shareholders and wider stakeholders in October 2010, the decision was
taken to lease the management of the company to one person. The company assets were
valued at Rs 347,600, and management was contracted at the lump sum payment of Rs.
30,000 per year. However, this arrangement failed to work due to labour shortages and
resentment amongst some of the shareholders.
Lessons can be learned from both enterprises, whether successful or unsuccessful.
Important factors determining success include the interest and commitment of local
people, a robust business plan, democratic leadership, a slim and effi cient management
team, full cooperation from local forestry offi cials and local entrepreneurs and investors,
and the availability of a sustainable source of raw materials.
From 2006 onwards, NSCFP focused its forest-based enterprise activities on
a limited number of specifi c products, selected for having particular potential to
impact on the livelihoods of the poor. Support was conceived according to the
value chain approach, under which the entire supply chain of a product from raw
material to fi nal article is analysed, and “bottlenecks” or weak links are identifi ed.
Interventions are then supported in a way that gives opportunities for the poor to
benefi t – thus drawing also on the concept of making markets work for the poor 17 .
This new approach was more commercially oriented, and the inputs provided - in
terms of direct advice, support for business services and links to sources of credit
and to markets - are less tangible, but nevertheless very practical.
The fact that from 2006 onwards NSCFP no longer provided capital or share to
bippana or to enterprises took a long while to be accepted, given the earlier
precedent that had been set. Instead, the project facilitated fi nancial institutions
and CFUGs and facilitated enterprises in seeking capital from other sources.
This included support in drawing up realistic business plans and in more general
17 See http://www.mmw4p.org/
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